Which countries are ranked the most competitive—and by what criteria?
Washington, DC, Oct. 27, 2023 (GLOBE NEWSWIRE) —
Geopolitical Tensions Reshape Global Competitiveness:
Insights from the 2023 IPS Rankings
Which countries are ranked the most competitive—and by what criteria? And why should competitiveness be an international concern?
On October 26, 2023, two internationally known Swiss-based organizations organized the Global Conference on National Competitiveness and Nation Brand 2023 to address these questions.
The national competitiveness rankings of 62 economies were released at the Global Conference at 10:00 am CET (4:00 am EDT).
The Global Conference’s organizers are the Institute for Industrial Policy Studies Switzerland (IPS-S) and the United Nations Institute for Training and Research (UNITAR), with Institute for Policy & Strategy on National Competitiveness (IPSNC) and the Institute of Nation Brand Promotion as hosts. Sponsors include aSSIST University, Franklin University Switzerland, Kyung-In Broadcasting Co., and The Washington Times.
“We believe that the insights garnered from this conference will be invaluable to scholars, practitioners, and policymakers, offering a deeper understanding of national competitiveness and sustainable growth strategies,” said Dr. Dong-sung Cho, professor emeritus of Strategy at Seoul National University and chair of the IPS-S.
Tracking Nations’ Competitiveness
A nation’s competitiveness matters because it is a gauge for the sustainability of its economic growth and prosperity. It also signals how well a nation will handle unforeseen challenges and other situations in which adaptability is required.
Nations of the world constantly compete to be the most prestigious in areas of self-governance, security, and economic stability—and attractiveness for tourism, investment, consumers, foreign students, and ability to host major events, including those at global levels.
Since 2000, IPS has been publishing the National Competitiveness Research by conducting statistical analysis for more than 60 economies. It uses 98 criteria in measuring a nation’s competitiveness. Among these, 57 criteria are hard data and the other 41 criteria are soft data.
The two authors of the IPS national competitiveness research, Dr. Cho and Dr. Hwy-chang Moon (professor emeritus of Seoul National University Graduate School of International Studies), explained that they could see limitations in other competitiveness ranking systems.
Dr. Cho developed the “9-Factor Model,” which assesses a nation on four physical factors, four human factors, and also chance events.
Physical factors refer to factor conditions, demand conditions, related industries, and business context. The human factors refer to workers, politicians and administrators, entrepreneurs, and professionals.
By analyzing these elements, plus factoring in unexpected conditions or opportunities for growth, the governments of the 62 countries can understand where they stand and tailor national strategies to improve their respective rankings.
The IPS Difference
Three major global institutions annually publish national competitiveness ranking reports: the International Institute for Management Development (IMD), the World Economic Forum (WEF), and IPS Switzerland. Each has its own unique focus. IMD defines competitiveness as a nation’s ability to create and sustain a competitive business environment. WEF concentrates on a collection of institutions, policies, and factors that dictate a country’s level of productivity. IPS, on the other hand, emphasizes the key determinants that enhance national prosperity by making strategic use of available resources. As such, the IMD report is particularly valuable for multinational corporations looking for investment opportunities, the WEF report serves as a useful reference for local firms, and the IPS report offers valuable insights for policymakers of countries and regions.
Based on its research, IPS-S and UNITAR release two national competitiveness rankings—one based on cost strategies and the other on differentiation strategies. This is because the competitiveness of countries can differ even if they have similar levels of endowed resources.
Also, when each of the two strategies is applied to countries, important differences in national competitiveness are highlighted.
For instance, Canada, Australia, United Arab Emirates, China and New Zealand were the top five in 2023 IPS cost strategy rankings. This refers to how well their businesses offered the best value for lowest costs while achieving corporate sustainability, growth, and a stable workforce and production.
However, according to the 2023 IPS differentiation strategy rankings, Denmark, Switzerland, the Netherlands, Finland and Singapore ranked the highest. Differentiation refers to a nation’s businesses that offer distinctive and/or superior products with extra value and brand recognition.
The two completely different ranking results from 2023 show the relevance of the two types of strategy rankings. It implies that the competitiveness of a country can depend on its strategic choices and resource allocations. It also implies that if a country understands its competitiveness factors, it can improve its ranking based on those choices and allocations.
Countries Partnering With Countries
For example, when China was assessed on the cost strategy, it ranked 4th in the world, but when assessed according to the differentiation strategy, its ranking dropped to 19th.
In contrast, when the US was viewed through the cost strategy, it ranked 12th. But when viewed under the differentiation strategy, it rose to 6th.
Meanwhile, Denmark, which was ranked 1st on the differentiation assessment, was 7th on the cost strategy ranking.
According to a statement by UNITAR, IPS-S, and the Taylor Institute of Franklin University Switzerland, this suggests that “a cost strategy is appropriate for countries with rich resources, whereas a differentiation strategy is more suitable for developed countries that are capable of producing higher-quality products.”
The three Swiss organizations noted that countries could improve their national competitiveness levels by working with other countries.
They gave the example of South Korea and Switzerland, which are 5,600 miles apart. Switzerland is known for its professional expertise on intellectual property rights and its array of unique, well-branded products. South Korea is known for its energetic entrepreneurs, networking base, and expertise in communications and electronics. “Hence, both countries can cooperate and share strengths and create synergies for improving their national competitiveness,” noted the Swiss organizations.
Hannah Hyunjee Kim Institute for Industrial Policy Studies 41-22-917-8400 firstname.lastname@example.org